All Forum Posts by: Robert Quiroz

@Ian Stuart

I understand that the banks will see me as additional risk since I'm new to multi family.  What does it take to get out of that category? After the first purchase? After I show tax returns? 

 @Travis Timmons

I appreciate the opposing viewpoint and the suggestion to look into Wes Moss. The $1M came from investing in real estate and my family has been in SFR rentals for 40+ years so I'm familiar and comfortable in real estate and believe that Multi-family investing is significantly more efficient that SFR.

So my take away from your points are:

- Invest in a growth/appreciation market (that still cash flows)

- Consistent cash flow from real estate is not dependable/suggested and will require significant effort. Look at other options

My take aways from the other posts my takeaways are:

- Financing provides diversification

- Financing leverages my cash 4x/5x to work harder for me for cash flow, tax deductions and return of initial investment

- Look at other options for retirement income

@Randall Alan

Thanks for that scenario; I'm not sure how I missed that calculation, or I never did it. I plotted the range of down payment vs CoC and it's pretty obvious, the less you put down the better your CoC is. Thanks for clarifying that.

Your examples for appreciation and depreciation are also helpful.

Are there any convincing arguments for buying in all cash?  Risk mitigation?

Hello All,

I will have around $1M in capital that I'm looking to generate 8-10% CoC returns for the purpose of replacing active income. I've decided to go the financing route to protect the value of that $1M against inflation over the next 40 years. However I wanted to get people's opinions here for discussion. I've listed some considerations below for financing vs buying in cash for multifamily home. I'm looking at MFH $450k and up in the Ohio markets (Dayton, Cleveland and Columbus).

Cash:

- Higher CoC returns

- No risk to being having negative cash flow with a loan (excluding capex)

- Buying/negotiating power with speed of transaction 

- No interest payments

- No risk of foreclosure

Financed:

- Possible exponential equity growth 

- Growth of initial investment is leveraged ~4x and most likely beat inflation in a decent area

- Mortgage interest tax deductions 

- Better financial efficiency from more doors

- Better diversification across more properties 

Are there other considerations I'm missing?  The ultimate goal here is to retire as soon as possible and not wait to grow equity over 5-10 years to be able to retire. 

@Ian Stuart, Does equity in a primary residence count toward net worth?

Great question and great responses.  Thanks everyone.

 Sam,

Thanks for your reply.  How would I even begin to network with building owners, let alone owners that may be ready to sell anytime soon?  It seems like it would be better to form relationships with brokers, agents, property managers or other people that would have input into many owners.  Admittedly, I am eager to find the right property and invest my capital to begin generating returns so sitting on a lot of capital for months or years seems wasteful.  

Thoughts?

Rob

 Brad,

Firstly, thanks for responding and more so thanks for offering to take a call with me. FYI, Brad talked to me for about 45 mins and let me as a bunch of questions. From our conversation, it seems like there are indeed properties that will cash flow in the 6-8% Cap rate and 10%+ cash on cash rate and that there are Debt-Service Coverage Ratio (DSCR) loans around 5.5% and 25% down that will fund a purchase with the appropriate cash flow.

Talking to a real person with experience has given me a huge sigh of relief.  I know that there absolutely are deals that can help me realize my goal of generating cash flow to replace my active income with passive income. 

Rob

Hi all,

Brand new to BP and just starting out with multifamily RE. My parents have 40+ years in SFH rentals and have done quite well for themselves and have educated my sister and I quite a bit about the industry. I'm taking a the Multifamily/commercial RE route to increase cash flow and timelines. I've read Michael Blank's book: Financial Freedom with Real Estate Investing and have started to do some research on markets I want to invest in.

I'm currently looking for more resources so I can see how real people are finding and closing real deals and what are realistic and possible cap rates and cash on cash rates.  Michael's book seems to be a bit unrealistic with the deals he uses as examples.

I have $200k of capital now, $1M of capital in June '25 and another $1M available when I get some units under my belt.  Looking to replace ordinary active income completely with passive income as quickly as possible while managing risk.

Rob

 Hi Mesturah,

I'm also new to BP and would love to hear more of your experience.  I have about $1M in capital to start with and would benefit from learning how you found your deals and the details.

Rob